The Blockchain Boom

How the emerging technology could be pharma's savior from costly regulations and counterfeit drugs.

By Meagan Parrish, Senior Editor

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Chronicled hopes MediLedger could evolve into a network-wide solution that will be adopted by major service providers like SAP and integrated into their current track and trace platforms. Although there are multiple solutions utilizing blockchain in development — and some companies are even inventing their own solutions to stay compliant with DSCSA — Somerville says she predicts that the market will eventually migrate to well-established and tested networks.

As for the next step and implementing blockchain through the supply chain? Somerville says that will largely depend on pharma companies themselves. If more drugmakers jump into the race to create blockchain solutions, the technology will advance more quickly. But if many aim to put off DSCSA compliance until the last minute (or bank on the rules being delayed to an even later date), blockchain will sputter. The quicker this solution is developed, the faster companies will realize the further benefits of blockchain.

More in Store

For the pharmaceutical industry, the potential benefits of blockchain go beyond track and trace.

“Imagine that we have a system that is focused on recoding the shipment of drugs,” Somerville says, explaining a next-use example for blockchain. “Now take that and then automate the payments.”

At many pharma companies, there are entire departments dedicated to investigating payments in the supply chain. Once developed, blockchain technology could create an automated payment and verified receipt every time the product changes ownership.

“That is the real pot of gold waiting for these companies,” Somerville says. “They are doing it for compliance but there are huge financial savings as well.”

Chronicled is also looking at ways blockchain could be used for raw material verification, temperature monitoring with deliveries and managing chain-of-custody for centralized medicines.

Others have envisioned a way to use blockchain to streamline the clinical trials process to more quickly move compounds through the pipeline. Toohey says a recall function could also be added to their solution to help locate and round up medications.

Roadblocks to Blockchain

Although the technology has the hype and momentum to realize its full potential, there are several key hurdles to widespread adoption. Firstly, the development hasn’t been lightning fast.

“It’s a slow technology, but it is meticulous and rock-solid accurate,” Toohey says.

It’s also possible that if pharma companies have already invested in a solution for DSCSA compliance, they won’t want to make a costly leap onto the blockchain bandwagon. Uncertainty with the new technology could also prompt companies to wait and see until there’s widespread adoption and a clearer return on investment.

But as with any new technology, putting short-term cost considerations ahead of long-term investment opportunities could mean that your company misses out on the best solution. In the same way smart phones quickly progressed from a novel curiosity to transforming our daily lives, the pace of further developments with blockchain is likely to increase once it hits the big stage in the pharma world.

“It does take time for a new technology to get that deep traction, but once it does, there are winners and losers,” Toohey says. “Those who delay are often left out. The same will happen in manufacturing and finance as this new technology embeds itself.”

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